Anooraq arranges 1.7 billion rand credit for Lebowa
2008-05-20 16:30 ET - News Release
Mr. Tumelo Motsisi reports
ANOORAQ CONCLUDES A BINDING CREDIT APPROVED TERM SHEET WITH STANDARD CHARTERED BANK
Anooraq Resources Corp. has executed a binding, credit-approved term sheet with Standard Chartered Bank to provide the company with sole underwritten debt finance of up to 1.7 billion rand for the acquisition by the company of an effective 51 per cent of Lebowa platinum mines, an operating platinum group metals (PGM) mine from Anglo Platinum Ltd., as more fully described in the company's news release reported in Stockwatch on April 14, 2008.
Anooraq has agreed to acquire Lebowa for a total cash consideration of 3.6 billion rand. The company intends to finance the purchase price through a combination of debt and equity. The exercise of share purchase warrants by Pelawan Investments (Pty) Ltd. in December, 2007, in a total amount of 1.586 billion rand, will provide a portion of the funds required by Anooraq for this purpose. Details of the Pelawan warrant exercise were set out in a news release in Stockwatch dated Dec. 24, 2007.
In addition, Pelawan, the majority shareholder in Anooraq, has advised that it has executed a credit-approved term sheet with Standard Chartered to provide Pelawan with sole underwritten acquisition debt finance of up to 700 million rand. Pelawan will apply these funds towards refinancing its existing bridge loan facility with Rand Merchant Bank.
Implementation of the above-mentioned transactions are subject to fulfillment of certain conditions precedent standard for transactions of this nature, including the conclusion of definitive financing agreements. In terms of the financing agreements, Anooraq and Pelawan are not obliged to enter into any hedging contracts in respect of Anooraq's future PGM production.
Anooraq's acting president and chief executive officer, Tumelo Motsisi, comments: "We are pleased to have obtained sole underwritten and significant debt finance from a major international bank, bearing testament to the underlying quality of the asset base we are acquiring from Anglo Platinum. This debt financing package is part of Anooraq's acquisition finance strategy and not only is it a rousing endorsement for our Lebowa acquisition but it also represents a major step towards implementation of the Lebowa transaction."
Sean Wallace, group head of corporate finance at Standard Chartered said, "Standard Chartered has a critical role to play in Africa's sustainable economic development. The bank is playing a leading role in supporting trade and investment which is driving economic growth on the continent. We are delighted to be partnering Anooraq with their debt finance, supporting continued economic development in the region."
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